End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.

Just as is indicated in the commentary to MR
1.1, “competence” does not require special training or prior experience
as long as the lawyer possesses basic legal skills such that he or she is able
to represent a client adequately through study and preparation. At a minimum,
the lawyer must either be familiar with well-settled legal principles applicable
to a particular problem or be able to conduct and actually conduct reasonable
research to learn them. The lawyer is measured in these efforts against the
objective standard of other lawyers engaged in practice in similar fields, and
each case of alleged incompetence must be judged on its facts. See Geoffrey
C. Hazard, Jr. & W. William Hodes,1
The Law of Lawyering 6-9 (2d ed 1990).In
addition to a basic level of knowledge, the rule also requires thoroughness
and preparation. Again, the thoroughness required is generally measured objectively.

For example, in In
re Spies, a lawyer who had “little to no experience in domestic
relations practice” agreed to obtain an uncontested dissolution of marriage
for the clients and then failed to file accurate and timely dissolution documents,
resulting in a three-and-one-half-year delay. 316 Or 530,
533, 852 P2d 831 (1993). Her representation outside her area of expertise
without acquiring adequate knowledge orskill was
one of the findings supporting disbarment. See also In
re Gastineau, 317 Or 545, 555, 857 P2d 136 (1993) (“[I]f a lawyer
does a poor job, but the client fortuitously or through the efforts of others
obtains a good result, that does not excuse the lawyer from providing competent
representation or justify neglecting the case” but result may be relevant in
determining whether the fee charged in the matter was excessive); In
re Odman, 297 Or 744, 687 P2d 153 (1984) (lawyer violated DR
6-101(A) when, during four years he worked on estate, he filed many documents
improperly or late, did not know basic steps of administering estate, and took
no steps to study or otherwise become qualified).

1.1:310 Relevance
of Ethics Codes in Malpractice Actions

Violation of Oregon’s DRs does not constitute negligence
per se or create a private cause of action. See Bob
Godfrey Pontiac v. Roloff, 291 Or 318, 331-32, 630 P2d 840 (1981);Clausen v. Carstens, 83 Or App 112, 120, 730 P2d
604 (1986); see also Hilt v.
Bernstein, 75 Or App 502, 510, 707 P2d 88 (1985) (regarding conflicts
of interest),rev den 300 Or
545 (1986). As a practical matter, however, an attorney who violates
a disciplinary rule is at greater risk of being subject to a malpractice claim.
Similarly, an attorney whose conduct results in civil liability for negligence
or an intentional tort may be subject to disciplinary proceedings.

The duty a lawyer owes his or her client in a professional
negligence case is the applicable standard of care. An attorney’s failure to
satisfy that standard of care in representing a client constitutes a breach
of that duty.

1.1:330 Standard
of Care

An attorney is required to use the care, skill, and diligence
ordinarily used by lawyers in the community in similar circumstances. See Childers
v. Spindor, 84 Or App 407, 410, 733 P2d 1388 (1987), reh’g
granted 91 Or App 119 (1988);Page
v. Cushing, 80 Or App 690, 697, 724 P2d 323 (1986).

1.1:335 Requirement
of Expert Testimony

[The discussion of this topic has
not yet been written.]

1.1:340 Causation
and Damages

Even if a lawyer fails to satisfy the standard of care
in the handling of a particular matter, no cause of action can be maintained
against the lawyer for legal malpractice unless the additional elements of causation
and damages are established. As the court stated in Chocktoot
v. Smith, 280 Or 567, 570, 571 P2d 1255 (1977), “The jury in the
malpractice case is called upon, in effect, to decide what the outcome for plaintiff
would have been in the earlier case if it had been properly tried, a process
that has been described as a ‘suit within a suit.’”

1.1:370 Defenses
to Malpractice Claim

(A) Damages

One of the most frequent defenses to a legal malpractice
claim is that, regardless of any attorney negligence, there was no damage. For
example, an attorney may admit negligence in handling a case but defend himself
or herself on the grounds that the case itself had no value. See Wilkinson
v. Walker, 84 Or App 477, 734 P2d 385, rev den
303 Or 535 (1987);Olson v.
Wheelock, 68 Or App 160, 680 P2d 719 (1984).

(B) "Avoidable Consequences"

Even if there are damages, legal malpractice plaintiffs
must take reasonable steps to minimize their damages following a loss. They
must avoid or minimize consequences that a reasonable person under the same
or similar circumstances would avoid.

(C) Comparative Negligence

The comparative-negligence defense arises in a few specific
fact situations:

(1) the client fails to supervise,
review, or inquire about the attorney’s representation;

(2) the client fails to follow
the attorney’s advice or instructions;

(3) the client fails to provide
essential information;

(4) the client actively interferes
with the attorney’s representation or fails to complete certain responsibilities;
or

(5) the client fails to pursue
remedies to avoid or mitigate the effect of an attorney’s negligence.

This defense is used most successfully when the client
is sophisticated, the attorney’s advice and actions are well documented, and
the attorney’s credibility is not in question.

(D) Judgmental Immunity

This traditional incarnation of the judgmental-immunity
defense—that an attorney was not liable for an error in the exercise of professional
judgment—is now obsolete. The key question now is whether the lawyer acted reasonably
and up to the required standard of care, i.e., whether the lawyer made an “informed
judgment.” Copeland Lumber Yards v.
Kincaid, 69 Or App 35, 38, 684 P2d 13, rev den
298 Or 37 (1984).

1.1:380 Liability
to Client for Breach of Contract, Breach of Fiduciary Duty, and Other Liabilities

(A) Breach of Contract

An attorney’s promise to produce a particular result, apart
from an agreement to exercise a general standard of care to prosecute a claim
or perform legal work for the client, may support a claim by the client against
the attorney for breach of contract. See Allen
v. Lawrence,137 Or App 181, 903 P2d 919
(1995), rev den 322 Or 644 (1996).

(B) Breach of Fiduciary Duty

In estate administration, the most common malpractice allegations
are breach of fiduciary duty as trustee, conservator, or personal representative
or negligence in improper or premature distribution of estate assets. Conduct
causing liability may be intentional malfeasance, preferential treatment of
favored beneficiaries by premature or excess distributions, and clerical or
computational errors. The attorney may also owe duties to persons other than
the retaining client, e.g., beneficiaries of the estate. See, e.g., Hale
v. Groce, 304 Or 281, 744 P2d 1289 (1987).

(C) Other Liabilities

(1) Information
from Client

Blind reliance on the client to provide complete and accurate
information will not insulate the lawyer from liability for, for example, a
mistimed bankruptcy filing. If the client provides the lawyer with improper
or incomplete information, the attorney can still be held responsible for failure
to ask additional questions that would have led to the receipt of more complete
and accurate information from the client. Whether the lawyer is ultimately responsible
will be determined by the reasonableness of the lawyer’s inquiry and, perhaps,
the sophistication of the client.

(2) Unauthorized
Acts or Representations

The lawyer may be at risk with either the client or the
adverse party if the lawyer makes representations or takes other actions that
are beyond the scope of those authorized by the client.

(3) Conflicts
of Interest (Only Regarding Malpractice)

Conflicts do not result in liability per se. See Hilt
v. Bernstein75 Or App 502, 707 P2d 88 (1985)
(allegations of negligence premised on violation of DRs does not constitute
negligence as a matter of law in civil action for damages). Nevertheless, a
conflict of interest can damage the client or make the attorney vulnerable to
accusations of malpractice. For example, an unresolved or disregarded conflict
increases the attorney’s vulnerability to accusations of fraud and other wrongful
or improper conduct. See DR 5-101(A),
5-104(A). However, a disclosure
and consent letter sent by the lawyer to the client with a copy to be initialed
by the client and returned to the lawyer will go a long way toward neutralizing
any subsequent adverse malpractice exposure based upon conflicts.

(4) Support
Staff Errors

The guiding maxim regarding clerical and support staff
in a law office is that the supervising attorney will be held responsible for
errors committed by subordinates. The lawyer will either be vicariously liable
through respondeat superior or be found to be actually negligent for failing
to properly supervising or perform the tasks, regardless of whether those jobs
were delegated to others.

(5) Securities
Violations

The bases for a claim of unlawful sales of securities are
either failure to register the securities (ORS 59.115(1)(a))
or securities fraud (ORS 59.115(1)(b)). Usually, common-law
fraud is alleged in connection with securities fraud claims. In securities claims
against lawyers, privity defenses generally do not apply; both clients and nonclients
can initiate causes of action for fraud and other intentional torts. The lawyer
need not be the primary “mover and shaker” to have exposure for a securities
law violation. See, e.g., Prince v.
Brydon, 307 Or 146, 764 P2d 1370 (1988).

(6) Unperfected
Security Interests

Many legal malpractice claims result from the lawyer’s
failure to perfect a security interest on behalf of the client. Invariably,
the problem does not surface until sometime later when the client wants to enforce
the contract and acquire and sell the collateral. For example, Uniform Commercial
Code renewal problems frequently arise from miscommunication (or noncommunication)
between the lawyer and the client as to the respective tasks to be performed
by the lawyer and the client.

(7) Estate
Planning

The biggest risk for a lawyer with respect to estate planning
is the failure to carry out the testator’s instructions. This can range from
failure to include a beneficiary to failure, as a matter of law, to accomplish
the desired result. The Oregon Supreme Court, in Hale,
304 Or 281,has madeclear that traditional privity rules generally will not afford the lawyer
a defense when beneficiaries have negligently been omitted. If the estate (and
therefore the beneficiaries) have to pay more estate taxes because of improper
drafting, the same rule would probably apply.

(8) Domestic
Relations

Common complaints regarding domestic-relations practice
include settlements or decrees not enforceable as intended; improper valuation
of assets in divorce, resulting in improper and inequitable distribution; and
client postsettlement remorse or complaint of inadequate settlement representation
or advice.

(9) Legal
Services vs. Business Involvement

A pitfall in representing business clients is the failure
to maintain sufficient separateness so that the attorney does not become responsible
for the failure or success of the business.

1.1:410 Duty
of Care to Certain Non-Clients

Traditionally, an attorney could be liable for negligence
only to a client, not to third parties. Attorney-client privity had to exist
between the plaintiff and the defendant before the plaintiff could maintain
a legal malpractice suit against the defendant lawyer. See Currey
v. Butcher, 37 Or 380, 390, 61 P 631 (1900).

More recently, attorney-client privity has not always been
necessary for an attorney’s liability for negligence or legal malpractice. See,
e.g., McEvoy v. Helikson, 277
Or 781, 786, 562 P2d 540 (1977) (exception to privity rule when attorney
acts as escrow); Metzker v. Slocum,
272 Or 313, 537 P2d 74 (1975) (following cases in other jurisdictions
that dispense with privity and apply policy involving balancing of various factors).
The greatest inroads in privity have been in the area of will drafting and the
subsequent impact on estates and beneficiaries. See, e.g., Hale
v. Groce, 304 Or 281, 744 P2d 1289 (1987) (intended will beneficiaries
may have action in contract against attorney). There are a number of tort claims
by nonclients that are permitted despite lack of privity, including, but not
limited to, intentional torts, defamation, and breach of fiduciary duty. A lawyer
may also be liable to a nonclient to whom the lawyer has made representations
or taken other actions beyond the scope of those authorized by the client.

Whenever an attorney knows or should know that a nonattorney
may rely on the attorney’s advice in connection with a legal matter, the attorney
should expect that an attorney-client relationship may well be found to exist.

1.1:430 Assisting
Unlawful Conduct

DR 7-102(A)
prohibits a lawyer from assisting the client in illegal or fraudulent conduct.
The zealousness required of all attorneys is limited by this prohibition.

In some circumstances, the restriction against assisting
the client in illegal or fraudulent conduct is broader than the ethical restrictions
on the lawyer’s personal criminal conduct unrelated to the practice of law.
Thus the lawyer is prohibited by DR 7-102(A)(7) from assisting or counseling
the client in any illegal conduct, and by DR
7-102(A)(7) and (8) from personally
participating in any illegal activity as part of
the representation of the client. These prohibitions include conduct that is
not criminal but is nonetheless prohibited by statute. See, e.g., In
re Hockett, 303 Or 150, 161, 734 P2d 877 (1987) (assisting in
fraud upon creditors held to violate rule).Though an attorney who acts as counsel
to an employer-fiduciary of an employee benefit plan pursuant to the Employee
Retirement Income Security Act of 1974 represents the employer and not the employee-beneficiaries,
the attorney must refrain from assisting the employer in breaching any fiduciary
duties owed by the employer to the employees. OSB Legal Ethics
Op No 1991-119.

1.1:440 Knowledge
of Client's Breach of a Fiduciary Duty

If a client tells his or her attorney about her past breach
of fiduciary duty in the course of trying to obtain legal advice, that communication
is subject to attorney-client privilege. See, e.g., State
v. Jancsek, 302 Or 270, 275, 730 P2d 14 (1986). Unless one of
the exceptions to attorney-client confidences enumerated in DR
4-101 applies, an attorney may not reveal a client’s past wrongs. An attorney
may, however, call upon a client to correct her past wrongs, and, if the client
refuses to do so, the attorney may seek leave to resign. See DR
2-110(A), 2-110(C)(1)(e).
The attorney must seek leave to withdraw if failure to do so would cause the
attorney to become directly involved in wrongdoing. See DR
7-102(A)(7); In re Johnson,
Or S Ct No S42475 (1995) (attorney violated DR 7-102(A)(7) when he failed
to call upon his client to reveal fraud to SAIF after his client collected workers’
compensation benefits to which he was not entitled); see also OSB
Legal Ethics Op No 1991-119.

If an attorney is notified of the attorney’s client’s intent
to commit a future breach of fiduciary duty, the attorney may disclose the client’s
intent and the information necessary to prevent the breach. The attorney could
also seek to withdraw and say nothing. Id.

1.1:450 Failing
to Prevent Death or Bodily Injury

DR 4-101(C)(3)
permits, but does not require, an attorney to reveal the intention of a client
to commit any crime, not just a crime involving risk of serious physical injury.
Cf. MR 1.6(b)(1).DR 4-101(C)(3) does not, however, permit disclosure of past, even recent
past, client crimes of which the attorney has learned through privileged communications.

1.1:510 Advocate's
Defamation Privilege

1.1:530 Assisting
Client to Break a Contract

Neither the DRs nor statutes prohibit a lawyer from assisting
or counseling a client’s breach-of-contract obligations, since breach of a contract
is not per se illegal or fraudulent. OSB Legal Ethics Op
No 1991-92. Similarly, a lawyer may ethically buy up a client’s bad checks
to avoid criminal prosecution of the client. OSB Legal Ethics
Op No 1991-18.